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VSNL may have to offer competitive rates to MTNL, BSNL from April 1

VSNL will have to offer competitive rates to MTNL (Mahanagar Telephone Nigam Ltd) and BSNL (Bharat Sanchar Nigam Ltd) for getting their international traffic on its gateways to retain the favoured status for two years after its privatisation.

IT and communication minister Pramod Mahajan said: "In case VSNL does not offer competitive rates, MTNL and BSNL would have the freedom to move on to private ISD players."

The cabinet committee on divestment had decided to provide the most favoured status to VSNL in view of ending its monopoly two years ahead of schedule by way of asking two state-owned basic telecom operators to move their ISD traffic to VSNL's gateway.

The minister, however, made it clear that the condition would apply only if VSNL's gateway charges are on par with private service providers.

VSNL is slated for privatisation in the current financial year by diluting the government stake to 26 per cent. The ILD sector would also be opened up for private sector participation from April 1 this year.

VSNL has been given a compensation package in lieu of advancing the date of ending its monopoly by two years. The package includes free licence for offering Internet services throughout the country and licence for NLD operations.

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